Ah, the tax refund… seems like such a good thing right? We lend the government our money throughout the year, they over-spend it, then send it back to us the following Spring. While taxes are a certainty in our culture, we try to reduce our refund as much as possible by adjusting our withholdings at work, but that can be tricky too.
Having a baby kind of through things off in 2012 (in a good way), but I think we’ve settled into a sweet spot for now when it comes to filing our taxes. In 2013 we pretty much broke even. We had been socking away a good portion of money that our online efforts were bringing in, knowing we’d have to pay taxes on those dollars, which left us with a good bit in set aside.
That process was based on our tax situation from 2012 and our friend Mary (CPA) gave us some guidance on how to approach saving to pay for taxes on that extra non-taxed income. So we simply took a cut off the top of whatever came in each month and set it aside to pay for taxes when the time came.